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Founder Reality with George Pu. Real talk from a technical founder building AI-powered businesses in the trenches. No highlight reel, no startup theater – just honest insights from someone who codes, ships, and scales.
Every week, George breaks down the messy, unfiltered decisions behind building a bootstrap software company. From saying yes to projects you don't know how to build, to navigating AI hype vs. reality, to the mental models that actually matter for technical founders.
Whether you're a developer thinking about starting a company, a founder scaling your first product, or a technical leader building AI features, this show gives you the frameworks and hard-won lessons you won't find in the startup content circus.
George Pu is a software engineer turned founder building multiple AI-powered businesses. He's bootstrapped companies, shipped products that matter, and learned the hard way what works and what's just noise.
Follow along as he builds in public and shares what's really happening behind the scenes.
New episodes every Monday, Wednesday, and Friday.
George Pu (00:00)
So I came back from the office yesterday, you know, disappointed and something obviously happened. I quite to be quite frank with you, I rarely feel disappointed towards any individual towards anything, right? That's not my personality, but today I felt that quite strong and I feel like it's fair to share the story, right? You know, make it anonymized, but obviously share the story so that other founders can learn from me. And today I want to talk about this topic that doesn't really get mentioned quite a lot because
But, but however, I do feel like every founder kind of feel learns this the hard way, right? How guaranteed payment can turn your best partner into your worst nightmares and worst performance. So, you know, coming back, I think this is a story about trust, stability and expensive lessons, right?
I will keep his name anonymized, obviously, but let's call him David, if we might. Let's dive in for more details. A few months ago, this person, David, has been helping us for the past two years, right? For my, now, Paylatter Startups and PutDirect. And a key part of our journey, basically, a key part of what's in PutDirect is that we need someone who's on the ground, who's able to speak the language of home improvement contractors. And that is really, I think, a small segment.
So we have this person, David, who I've known him for actually for the past five years, which is the craziest thing, right? Basically in the beginning of journey, I know him and we've have worked together with, think a good relationship together. And David was engaged. He was responsive. He calls me many times in a day. He's a little bit old school, but he actually solves real problems. And he gave me a lot of insights about, you know, how the industry works. And that was like five years ago.
So obviously having someone on the ground who's able to let us know about exactly how things work. I'm coming from an industry veteran. think this is such a, you know, it's an amazing thing. And we have solved many problems together over the years and our arrangement has always been the same. David will keep a huge percentage, a reasonable percentage of the payouts, right? Let's say 60 % as the take-home pay. And we, SimpleDirect, would take 40 % of take-home pay. And this is a very generous offer.
If you look at how the affiliate payments, all the partnership payments are, how the referral payments have run out, it is probably one of the most generous payout arrangements out there for simple direct, even though our profit margin, you know, on just like a excluding payroll basis has been quite high. So for a long time, we're basically making, for example, like if we make a thousand dollars from the SaaS products, obviously $600 goes to David and we get to keep the $400. So as you can see, it's not a, you know, super
great arrangement for us, but we have stuck it through because we desperately needed customers in early days. And this is one of our go-to-market strategies. So we've worked together with this arrangement and has worked quite well. You know, the David was able to close customers and we were able to do a revenue share. then I think that has happened that has been like the past year and a half or two years or so. And the reality is this is not David's full-time job. Obviously this is an essentially affiliate or partnership arrangement. So basically what he does.
Is that he goes to his contacts or he picks up the phone and call a few of his friends or connections or friends of friends, right. And asked them if they're interested in joining simple direct. That's an arrangement obviously that we agreed on. However, was able to see that there's obviously a discontent from David and I can see that he's becoming increasingly unhappy about it. And there were a few confrontations, I think on weekends, especially, think there's once on Sunday morning where he was very angry and sent me an email basically.
with big caps, where are the leads? Where's the freaking report? You know, where's, where's my freaking leads? You know, something like that. When I did send it to him on Wednesday, I remember so clearly, you know, even though it was just like a few months ago. And I was just became so confused, I guess, at a time about, okay, like why is our star performer affiliate becoming so increasingly angry at me? So I emailed him and say, Hey David, let's just cool it all down.
Right. We are all here on the same team. We're all thinking about the same goal. Our goal is to make sure simple direct succeeds as a business. Right. And we are on the same team. If some product is doing well, then you're doing well and I'm doing well. Right. It's as simple as that. So that was starting to be game in the cracks and then, and he approached me, David approached me just a few days after, after saying he agreed with cooling things down. He told me that he basically told me he's looking for a more perpetual monthly.
payroll agreement and my concern at the time obviously was that we have done this actually before. So we tried the same thing, I think back in 2020, 2021, whereas we have paid him for a little bit of work for as a monthly retainer payroll, but we paid a monthly retainer and in return, he's going to go out, call the leads, call the sales, you know, call the different distribution channels and activate his network and find people. However, it didn't really work out. So this time around, I became a little bit more cautious.
And eventually he became a little bit, a little bit more eager, a little more pushy, if you may. And after many pressure, I did agree. I think I believe it was this May or this June. I agreed that, okay. I said, okay, David, I totally understand your point of view. Your work and your contribution is super important to me and my team. And my team and I appreciate the work that you have done as an affiliate partner. Right. However, we don't think right now is a good time for you to take on a sales role right now.
Because a sales role, as you know, did not work before, right? Many, many years ago when we try to bring you on for full time. Moreover, we're also going through some internal changes. So we want to make sure that's over. So I believe he loves the work. He loves opportunity. He's a, he's a culture fit. making it official is a no brainer, right? But what happened after signing that agreement, I still remember it was, it was the end, it was the end of May. And after we signed it, you know what happened? Nothing, nothing. I'm not talking about a gradual decline.
I'm talking about a complete radio silence, right? Before the contract, they were proactive. He's proactive. He's reaching out. He's checking in. He actually cares about our customers. He actually cares about the outcomes. But after we signed, it's like a switch have flipped. It's like I turned off the lights, right? The only, you know, the only, I mean, the only email I have received in the past six weeks, and we can go a little bit further back in the last eight weeks or 12 weeks, the only emails I've asked was about from him.
from David was about their compensation status. And it wasn't about customers and it wasn't about issues and it wasn't about how to improve things. Right. Just like, Hey, George, like what's the status of my pay? Right. And this is difficult because I have recently been reminded by CFO about something we learned the hard way while working with one of our learning partners earlier this year, they terminated the relationship with us because we weren't delivering results.
Right. And, and we were in strictly revenue share agreement. We weren't getting paid a monthly fee for delivering, you know, the, for, basically doing the work for the lending partners. We're out there finding more leads or out there finding more homeowners. We're getting them to a platform, getting to the lending partners and they're not paying us anything right. Other than like when, when the sale is successful, we used to get 1 % other than that there's nothing. And a few months into it, they terminate the agreement with us. Right. And you know what? I think they're right to do it. They have performance based.
expectations when I couldn't meet them, when my team couldn't meet them, they cut ties immediately. They sent us an email. It's over. Right. Here I was on the other side. And I personally think it's a problem that I've had for quite some time. That's like a difficulty to say no and having too much empathy sometimes, which, know, we'll talk about another day, a good or bad thing. However, I really think paying someone who had complete checked out over the past few months, it's has been just really disappointing because I.
thought this person is on the phone calling customers. thought this, this person is helping our existing customers with problems. When I got the calls from many customers wanting to wanting me to solve the problems, I would assume is because David sent them over to me. Right. However, after figuring out with the customers on the phone, that's not true. They couldn't find him. They called him and the only thing he said is just like, go, go call George or go call the support number. Right. I'm not available. And the disappointing thing I think.
Especially to me is that this is not just a stranger who I took a chance on, It hit someone I've been working successfully for months, for years, you know, someone who's been paid for us multiple times and also deliver good work, right? Sure, I do pay, I did pay a lot for essentially zero work over the past five months, but I don't really think at this point is about money for me. It's a complete shift in character from this person. As soon as we finalize things and sign that signature, the call volume drop, he
We were used to be on the call, I guess, not every day, but obviously a few times a week discussing about business development, discussing about marketing, discussing what's going on with this and that customer. As soon as we signed the agreement, the calls went to zero. There's no more calls. And I didn't realize at the time, but you know, when I do realize it is just too late, the ship has left the station and there's no nothing coming back. And obviously you also know that the only communications we've had over the past couple of weeks was just about paychecks and
that tells you everything about how David actually views about this relationship right now. so yesterday I sent the termination notice as per the contract about terminating our monthly year arrangements. It was clean, you know, it was professional. It was by the book. Basically we had a term that says that you like either party can terminate this agreement by giving a 30 day notice. So I gave that 30 day notice by an email, but I also made sure I wanted to be honest about why because
Quite frankly, this is not the first time I made this mistake. I sometimes get emotionally attached to the people I'm working with and I really care for them and I really want to do well. So this is not the first time I guess it probably wouldn't be the last time. ⁓ However, it's those things and you know, I just wanted to make sure he knows why I am disappointed about this. And I told him directly that, you know, the lack of contribution since we signed the formalized the agreement was really frustrating and unsustainable for us as a business, right?
If we're paying you to do this and you didn't do anything at all, how everyone else on the team thinks about me as a leader and us as a team, right? And economically also, obviously it's not sustainable. It's not making sense, right? Because I just believe that I wouldn't, I wasn't planning to tell the reasons, but then I thought about it. was like, why am I doing this? If I'm telling the reason, I'm just repeating the same mistake over and over again. I just want people to know obviously that sometimes their actions do have consequences, right? Even though in this case, I wonder if they do care or not.
But I do want to just get the word out that there are consequences for the actions. This person has been working with me for four to five years. He and like David knows exactly how this works. He's been, he's been doing the same thing over and over again. It's just like, we gave him a formal role about this compensation that basically let him continue on what he's doing already. It's just like, we gave him compensation and that's the result turned out. So it obviously made me rethink a lot of things. I definitely think.
There's a lot to learn for me as a founder and for everyone else listening as a founder. And here are a few things I think I'll do differently next time around for anybody. So obviously the first is to set a promotional periods. I believe that's important probation. So don't have long-term arrangements unless someone proves themselves that they can maintain their performance under different conditions. Right? For example, give it a test, give it a probation period of 30 days, 60 days, 90 days, or to see how things go. If things don't work out.
the probation period gives you the right as an employer or as like a contract party to basically terminate the agreement at cost. So that's a really good thing to do. And I did not do that. And second, think also very, very super, super important, delivery based compensation, right? So like if you have done something, right? Show me or show the team what you have done. If you don't have any deliverables, there's no payment, right? For your work. And third is that it's more for me or for any manager is that to have regular check-ins.
You know, with clear expectations and don't be like me, don't say like, you know, we'll figure it out as we go approach. That doesn't work. That never works. And, and as a leader, I take 100 % responsibility for this. lastly, I think trust your team, obviously trust new people that you bring into a team, but also verify it, right? I want to believe personally, people do the right thing. And I'm always maintaining an empathy first approach, even though I think at many times it has costed me speed, capital and other things, but I always do believe that.
building a team is about building empathetic workplace and I don't want to be micromanaging people. So that has been a principle and I think has been paying off for a lot of our, you know, team members have been doing incredible job, but sometimes this is like, sometimes it slips, right? And to be quite frank, this is one of times that it flips. So without discipline, it's, it's not a role that I think people can take on if they do have other gigs going on, or they just don't have the discipline or interest to keep going on to do this business with me. Nevertheless.
just very disappointed. I do want to point out that the story here is not don't trust people, right? Obviously you need to trust your team, know, trust people. And there's so many great people that you can find that can make your business from here to a hundred plus. And the lesson here is not don't trust them. It's basically do your due diligence, right? Structure your agreements and align your incentives and success. So you can create a successful environment for everybody involved. Right? I, for me, I wanted to give somebody
stability and recognition for the work they've done, right? I want to move them to a next level and that's not wrong, but I think I should have structured it differently. So the stability comes from actually consistently delivering value, right? And not just from having signed a piece of paper and that's the stability and that is totally wrong. That's not something that should have been happening, right? There should always be deliverables. There should always be appreciation of deliverables and there should be quite frankly, shaming.
for not reaching the deliverables and consistently slacking off. And that's not happening for the past few months. And I personally bear a lot of responsibilities for that. However, you know, for the going forward, if I do have to be put myself in the shoe again, I will be designing systems where, you know, the only way to win in the team is actually doing the work, right? I create incentives to actually push people towards the behavior I want to see.
and not push them away from behaviors I want to see. Because here's the hard truth, right? Most people, why they're wise or fall to meet the expectations you set and the systems that you create. And at the end of the day, it's you, it's the founder, right? It's a system that you create. If your system rewards showing up and that's what you get. If your system rewards results and that's what you get as well. Right? So you determine your destiny and choose wisely. And that's something I always say as founders, we determine our own destiny.
Right? So there are always those hiccups that you will get and that's what you get. What you dig is what you get. To close off on this episode of my lesson learning, I really think this is the hard lesson that most founders don't want to hear is that your system determines your results. If you are rewarding just people showing up and not doing anything or just showing up and hey, yes, I'm here. That's what you get. Right? If you reward outcomes, actions, and actually getting things done, and that's what you get.
So I create a system that rewarded David for doing nothing. And that's exactly what he delivered. Right. And the fault is on me and, know, also maybe on him. So next time I'm designing new systems where the only way to win is actually doing the work and working with our team to make it successful. And that's today's expensive lesson. this is George Fu and I'll see you next time.